Question

View History Bookmarks Window Help 0 YPLUS 948 Tue 335 edugen.wileyplus.com Nash's Trading Post, LLC had the following transactio Chapter 04- Adjustments Return to Blackboard Kimmel, Financial Accounting, 9e Help System Announcements ancial US Time: 03:15 PM / Remaining: 41 min. CALCULATOR PRINTER VERSCON BACK NEXT Multiple Choice Question 251 Franklin Company schedules an appointment with High Country Septic Services on May 2. High Cour c es Franklin's septic system on May and leaves an invoice at that time. Franklin pays the invoice on May 19. On what date does High Country satisfy its performance obligation? May 19 May 9 O High Country does not have a performance obligation. ОMay 2 Click if you would like to Show Work for this question: Open Show Work Question Attempts: 0 of 1 used SAVE FOR LATER SUBMIT ANSWE

Answer 1

Answer:

May 9.

Explanation:

Performance obligation in a service contract is satisfied on the day of actual performance or on the day of passing the invoice. Date of agreement and date of payment is not considered in this regard.

In the question above, date of performance and leaving the invoice is given as May 9. So it is the answer.

May 2 is the date of agreement. It is not the date of satisfaction of performance obligation by High Country Septic Services. May 19 is the date of payment. It can be called as the day when Franklin Company is discharged of it's liability, i.e. to pay for the services.

Therefore, the date in which High Country is discharged of it's performance obligation is May 9.